Week 4: Public and Private Health Care, Health IT, Financing Healthcare

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Questions and Answers

What is the primary purpose of Medicare as established by the Social Security Act?

To cover care for veterans only

To provide health insurance primarily for low-income families

To offer health coverage for individuals over age 65 and people with disabilities (correct)

To provide health coverage for individuals under age 65

Which part of Medicare is primarily responsible for prescription drug coverage?

Part B

Part A

Part D (correct)

Part C

Which aspect of Medicaid is incorrect regarding its funding structure?

States must adhere to certain federal requirements to receive federal funding.

It covers individuals and families with low incomes and resources.

It is exclusively funded by state governments. (correct)

It provides federal matching funds based on state expenditure.

What significant change regarding Medicaid occurred following the Supreme Court's decision in 2012?

States gained the option to adopt Medicaid expansion. Signup and view all the answers

What is a major consequence of the Medicaid expansion being optional for states?

Many adults fall into a 'coverage gap,' lacking affordable health options. Signup and view all the answers

Which of the following is NOT typically covered by Medicaid?

Cosmetic surgery procedures Signup and view all the answers

Which category of services is covered under Medicare Part A?

Inpatient hospitalization and skilled nursing Signup and view all the answers

What is the total cost of care covered by Medicare in 2017?

$702 billion Signup and view all the answers

What percentage of national health expenditures (NHE) did Medicare account for in 2016?

20% Signup and view all the answers

Which of the following is NOT a characteristic of the U.S. healthcare system?

Fully overseen by a single public entity Signup and view all the answers

What is the primary purpose of the Affordable Care Act (ACA) implemented in 2010?

To extend insurance coverage to the uninsured Signup and view all the answers

Which government program covers healthcare for all federal employees?

Federal Employees Health Benefits (FEHB) Program Signup and view all the answers

Which part of Medicare covers 80% of physician services and outpatient care?

Part B Signup and view all the answers

What percentage of the U.S. population was projected to be financed through governmental mechanisms in 2024?

67.1% Signup and view all the answers

Medicaid and Medicare together represent what percentage of national health expenditures?

35% Signup and view all the answers

The federal government committed to covering up to what percentage of CHIP costs starting in 2015?

100% Signup and view all the answers

What is a key driver of the cost of health insurance in the U.S.?

Health services price and volume Signup and view all the answers

What is the criteria for an individual under 65 to be eligible for Medicare?

Must have a specific disability Signup and view all the answers

What service is included in the coverage provided by Medicare Part C?

Telehealth services Signup and view all the answers

How are funds for Medicare Part A primarily generated?

Payroll deductions Signup and view all the answers

Which statement best describes Medicaid's representation in U.S. national health expenditures?

Represents 17% of national health expenditures Signup and view all the answers

What is the age of eligibility for Medicare Part A?

65 years Signup and view all the answers

How does high utilization of healthcare services affect insurance premiums in the U.S.?

Leads to increases in next year’s premiums Signup and view all the answers

What primary advantage do electronic health records (EHRs) provide to healthcare providers?

Facilitate better management of patient care through secure information sharing Signup and view all the answers

How does the U.S. healthcare system compare to other industrialized countries in terms of price control?

The U.S. does not engage in significant price setting compared to others Signup and view all the answers

What is a significant challenge faced by telehealth in rural communities?

Inadequate access to high-speed internet infrastructure Signup and view all the answers

Which factor contributes to the high administrative costs in the U.S. healthcare system?

Complex multi-payer systems involving numerous insurers Signup and view all the answers

Which statement best reflects the impact of consumer expectations on healthcare spending?

Consumers lack awareness of actual costs and often equate price with quality Signup and view all the answers

What role did the 2009 Health Information Technology and Economic and Clinical Health Act play in healthcare?

Provided billions to promote adoption of certified EHRs by providers Signup and view all the answers

Which of the following represents a consequence of high pharmaceutical costs in the U.S.?

Americans paying significantly more for drugs than those in other countries Signup and view all the answers

What is the main focus of the Veterans Administration Health Systems?

Serving over 9 million veterans through a large number of facilities Signup and view all the answers

What is a key concern regarding the adoption of electronic health records (EHRs)?

Lack of evidence for EHRs' effectiveness Signup and view all the answers

Which of the following influences disparities in health outcomes within the U.S. healthcare system?

Variability in healthcare quality despite high spending Signup and view all the answers

How does the Indian Health Service (IHI) maintain its relationship with American Indian tribes?

By upholding a guardian or trust relationship as mandated by the U.S. Constitution Signup and view all the answers

What aspect of healthcare is primarily influenced by inflationary payment models?

Encouragement of providers to increase service volume and potential overutilization Signup and view all the answers

What is mobile health characterized by?

Public health practices using telecommunications for education and alerts Signup and view all the answers

What challenge does chronic illness pose to the U.S. healthcare expenditure?

Chronic conditions represent a large portion of total health expenditures Signup and view all the answers

What is the main purpose of Medicare Part D?

To cover outpatient prescription drugs Signup and view all the answers

Who are considered dual eligibles in the context of Medicare and Medicaid?

Individuals receiving both Medicare and Medicaid Signup and view all the answers

What outcome does the ACA aim to achieve by phasing out the Part D donut hole?

To ensure seniors can afford their prescription medications Signup and view all the answers

What is the main financial support structure of Medicaid?

It is jointly funded by state and federal governments. Signup and view all the answers

Which factor did the ACA expand eligibility for Medicaid to include?

Low-income single parents with children earning below 138% of the federal poverty level Signup and view all the answers

What is the purpose of the Hospital Readmission Reduction Program under the ACA?

To penalize hospitals for preventing unnecessary readmissions Signup and view all the answers

What type of care are Accountable Care Organizations (ACOs) primarily intended to promote?

Coordinated care to reduce unnecessary spending Signup and view all the answers

How does the ACA affect the coverage of preventive services?

Mandates coverage without cost-sharing Signup and view all the answers

What is the national average percentage of spending on Medicaid?

19% Signup and view all the answers

What is a requirement for states to receive federal Medicaid matching grants?

Ensure a minimum set of benefits are offered Signup and view all the answers

What funding mechanism does CHIP rely on?

A combination of state and federal funds Signup and view all the answers

What is a major component of Medicare’s physician payment reform?

Payment linked to resource-based relative value scale (RBRVS) Signup and view all the answers

Keeping the CHIP eligibility standards, how often must states maintain them?

Throughout the duration of CHIP funding Signup and view all the answers

Study Notes

Public Insurance: Medicare and Medicaid

Medicare, established in 1965, provides healthcare coverage for individuals over 65 and people with disabilities.
It is financed through taxes, general revenues, and premiums paid by enrollees.
In 2017, Medicare covered care for 60 million people at a cost of $702 billion.
Medicare is divided into four parts:
- Part A: Pays for inpatient hospitalization, home health, hospice, and skilled nursing.
- Part B: Covers certain medical services and supplies like outpatient healthcare, physician services, and services by Medicare-approved practitioners.
- Part C: Known as Medicare Advantage, expands beneficiaries’ options to participate in private sector health plans. These plans must cover services provided by Parts A and B (excluding hospice services).
- Part D: Covers prescription drugs not covered by Parts A and B.
Medicaid, also established in 1965, is a joint state-federal healthcare coverage program for individuals and families with low incomes and low resources.
States create the plan, and the federal government matches the coverage.
The Supreme Court's 2012 decision made the Medicaid expansion optional for states.
As of November 2018, 36 states and the District of Columbia had adopted the Medicaid expansion.
In states that didn’t expand Medicaid, many adults fall into a “coverage gap,” lacking affordable health coverage options.

Private Insurance

Most people have private health insurance through their employers.
The Affordable Care Act (ACA) aimed to increase coverage for individuals who don’t get health insurance through their employer or public programs.

Veterans Administration Health Systems

The Veterans Administration Health Systems is the largest integrated healthcare system in the U.S.
There are over 1,240 facilities serving over 9 million veterans with a budget of $286.5 billion.
The 2011 Transformation Plan aimed to transition the claims process from paper-based to electronic, eliminating the large backlog of disability claims.

Indian Health Service (IHS)

The U.S. Constitution recognizes a trust relationship between the United States and federally recognized Indian Tribes.
The federal government is responsible for providing health services to American Indians and Alaska Natives.

Health Information Technology

Health information technology (HIT) involves the electronic transfer of health information.
It includes electronic health records (EHRs) and electronic prescribing.
EHRs aim to allow healthcare providers to manage patient care better by sharing health information securely.
EHRs enable providers to:
- Record accurate and complete information about a patient’s health.
- Provide care quickly.
- Better coordinate patient care.
- Better share information with patients and their caregivers.
The 2009 Health Information Technology for Economic and Clinical Health Act allocated billions of dollars to promote providers’ adoption and use of EHRs.
As of 2014, the federal government had distributed $28.1 billion to eligible providers through the Medicare and Medicaid EHR program.
The first commercial EHR system appeared in 1971 at El Camino Hospital, integrating physician, nurse, and pharmacy processes.
Concerns exist regarding a lack of consistent evidence for the effectiveness of EHRs.
Healthcare providers may not adopt EHRs due to difficulties implementing EHR systems in large health systems.

Telehealth

Telehealth involves the provision of remote or long-distance clinical healthcare, public health, and health education through telecommunications technology.
It is increasingly becoming an essential means for Americans living in areas with a shortage of healthcare professionals to access cost-effective, quality healthcare.
Real-time interaction through telehealth can substitute for in-person visits and can be used for consultations, diagnosis, and treatment services.
Telehealth includes monitoring, electronically collecting personal health data transmitted to the provider for care and support.
Mobile health, also part of telehealth, encompasses public health practice and education, like text reminders to promote healthy behaviors or alert about disease outbreaks.
Despite the potential of telehealth to improve health in rural communities, these communities often lack the infrastructure, such as access to high-speed internet, to benefit from it.

Financing Health Care in the United States

Numerous factors influence the growth in national healthcare expenditures, including:
- Weak Price Controls: Unlike other industrialized countries, the U.S. government (federal and state) sets less pricing and regulation of what can be charged for healthcare services and supplies.
- Administrative Burden: The U.S. has complex, multi-payer administrative systems for insurers and providers.
- Care Patterns: The use and overuse of expensive medical technology and specialists persist, while there’s a lack of focus on primary care and upstream social determinants of health.
- Inflationary Payment Models: The fee-for-service reimbursement model incentivizes providers to increase the volume of services provided, potentially leading to unnecessary healthcare.
- Consumer Expectations: Consumers often lack knowledge of the actual cost and value of their care, and may perceive more expensive care as better care, even if evidence doesn’t support it.
Pharmaceutical costs are also a significant factor, with ongoing development of new medications leading to new treatment options.
Americans use many of these medications but also pay more for them than people in other countries.
Future costs will be impacted by the aging population and rising number of people with complex chronic illnesses.
25% of all Medicare expenses for those over 65 are incurred in the last year of life.
Chronic illness accounts for 2/3 of all healthcare expenditure, rising to 86% when mental health conditions are included.

High Costs

Private health insurance often comes with high premiums, deductibles, and out-of-pocket expenses, making it difficult for many to afford necessary care.

Access Issues

Individuals with private insurance may face barriers to accessing care, such as limited provider networks and coverage restrictions.

Inefficiencies

Significant administrative costs and inefficiencies within the system contribute to high overall expenses.

Access Disparities

High costs can limit access to necessary care for many individuals, leading to disparities in health outcomes.
There are limited providers in rural areas.

Quality Variability

Despite high spending, the quality of care can vary widely, with some regions and populations receiving substandard care.
The US ranks low in quality and last in health outcomes among 11 wealthy countries.
Medical errors are recognized as the third leading cause of death in the country.
The Affordable Care Act (ACA) from 2010 attempted to reshape how healthcare is paid for, enhance transparency, and test new payment and delivery models, primarily aimed at extending insurance coverage to uninsured Americans through private insurance regulation, expansion of public insurance programs, and creating health insurance marketplaces to foster competition in the private health insurance market.
Despite its implementation and revisions, health insurance affordability and cost containment remain ongoing policy challenges.

National Health Expenditures

National health expenditures (NHE) were $3.3 trillion in 2016, representing 17.9% of the Gross Domestic Product (GDP).
Medicare accounts for 20% of all NHE, and Medicaid accounts for 17%.
The federal government’s share of this health care spending was 28.3%.

Public Funding Systems

The U.S. lacks a single entity overseeing or controlling the entire healthcare system, making the payment for and delivery of healthcare complex, inefficient, and expensive.
The system consists of numerous public and private programs that form interrelated parts at the federal, state, and local levels.
Public funding systems continue to represent a larger proportion of health care spending, including Medicare, Medicaid, the Children's Health Insurance Program (CHIP), the VA, TRICARE, the Indian Health Service, and the Federal Employees Health Benefits (FEHB) Program.

ACA and CHIP

The ACA committed the federal government to paying up to 100% of CHIP costs starting in 2015.
The ACA also required states to maintain eligibility standards for CHIP.
CHIP was reauthorized for six years in January 2018 after several delays and public outcry.
CHIP enrollment remains high, with an estimated 35.5 million children enrolled in 2018.

Medicare Qualifications:

Individuals aged 65 or older generally qualify for Medicare.
Individuals under 65 with certain disabilities also qualify.
To qualify, individuals must have paid Medicare taxes for at least 10 years.

Medicare Parts

Part A: Covers hospital and related costs at age 65. It is financed through payroll deductions to fund the Hospital Insurance Trust Fund at a payroll tax rate of 2.9% of earnings paid by employers and employees (1.45% each).
Part B: Covers 80% of physician services, outpatient medical services, homecare, durable medical equipment, labs, physical therapy (PT)/occupational therapy (OT), and outpatient mental health services. It is financed through subscriber premiums, general revenue funding, and cost-sharing beneficiaries at 20% of the costs of care used.
Part C: The Medicare Advantage Program allows members to enroll in private health plans and receive additional services like vision and hearing care. It covered 33% of all Medicare beneficiaries in 2017.
Part D: The outpatient prescription drug plan is voluntary, subsidized, and has additional subsidies for low and modest income people. It had $99 billion in benefit spending in 2016, covering 43 million beneficiaries. It is financed through general revenues and beneficiary premiums, as well as state payments for dual eligibles (people receiving both Medicare and Medicaid).

Medicaid Qualifications:

Individuals and families with low income qualify for Medicaid.
Pregnant women with low income also qualify.
Individuals receiving Supplemental Security Income (SSI) qualify.
Eligibility is determined by financial status.

ACA Provisions for Cost Control

Essential Benefits Requirement: Creates a social and financial safety net but doesn’t create less expensive insurance premiums, leading to challenges with cost control.
Hospital Readmission Reduction Program: Imposes financial penalties on hospitals exceeding a defined readmission rate for the same cause. This shifts the focus from volume-based care to value-based care.
Medicare Part B Physician Payment Reform: Payment is linked to a resource-based relative value scale (RBRVS) based on the degree of physician work, practice expertise, and cost of malpractice for the specialty and geographic cost of living. This aims to decrease expenses and redistribute physician services to increase primary care and reduce the use of highly specialized physicians.
Preventive Services: The ACA mandates coverage for preventive services without cost-sharing to reduce long-term healthcare expenses.
Medicare Payment Reforms: Changes in Medicare payments incentivize quality over quantity, including penalties for hospital readmissions.
Accountable Care Organizations (ACOs): Encourages the formation of ACOs to promote coordinated care and reduce unnecessary spending.
Health Insurance Marketplaces: Establishes marketplaces to increase competition among insurers, hoping to lower premiums and out-of-pocket costs.

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Description

This quiz provides an overview of Medicare and Medicaid, two crucial public insurance programs established in 1965. Learn about the different parts of Medicare, their coverage, and the role of Medicaid in providing healthcare to eligible individuals. Test your knowledge on these significant healthcare systems.